Conservative culture spokesman John Whittingdale yesterday called for the BBC to scrap its commercial arm, BBC Worldwide, and hand the exploitation of its programmes and brands over to outside companies.

He said the BBC should cut back on activities where it was competing with commercial rivals.

But Mr Whittingdale also pointed to areas of BBC output which still provide a distinctive public service and should be retained, including BBC Radio 1, EastEnders and the BBC's two digital TV children's channels, CBBC and CBeebies.

Mr Whittingdale said the Conservative party had no firm policies relating to the BBC and was waiting for the recommendations of the policy group being chaired by former Channel Five chief executive David Elstein.

Mr Elstein was hired by the party this year to head a panel of experts who would help to draft a policy on the corporation's future, but it is not expected to publish its report before next year.

"The first area where I have serious concerns about the legitimacy of what the BBC is doing is BBC Worldwide," Mr Whittingdale said, speaking at a broadcasting press guild lunch yesterday.

"Of course the BBC should seek to maximise the value of its assets, but I don't think it should necessarily engage in [all this commercial activity] itself." He added that the BBC should not be in magazine or book publishing, software development, setting up a music label, or operating commercial TV channels such as UK History.

If the BBC felt something like Top of the Pops could be a valuable magazine brand, it should license the name to IPC or Emap and allow them to publish it, according to Mr Whittingdale.

He said it was bizarre for the BBC to be planning 10 new magazine launches in the next year. "Is it providing something the market doesn't? It's market distortion and unfair competition which is the problem."